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Investing.com-- Asian stocks advanced on Friday with Japan leading gains, as a rally in U.S. tech shares lifted sentiment, while investors weighed Tokyo’s cooling inflation, which clouded the outlook for further Bank of Japan rate hikes.
Gains were limited as investors remained cautious ahead of the July 9 U.S. tariff deadline, despite reports of a finalized U.S.-China trade truce and imminent deals with other partners.
Major U.S. stock indexes ended higher overnight, driven by strong gains in tech and bank stocks. The S&P 500 and Nasdaq closed just below their record highs.
U.S. stock index futures traded largely unchanged in Asian trading hours on Friday.
Japan’s Nikkei hits 5-mth high; Tokyo CPI in focus
Japan’s Nikkei 225 index jumped 1.6% to its highest level since late January, boosted by tech stocks. The broader TOPIX index climbed 1.2%
Tokyo Electron (TYO:8035) shares surged 5%, and Sony (NYSE:SONY) Corp (TYO:6758) stock climbed 2.6%, while SoftBank Group (TYO:9984), a major weight in the benchmark, added nearly 3%.
Meanwhile, data on Friday showed that Tokyo’s consumer price index rose less than expected in June, casting doubt on whether the Bank of Japan has sufficient room to raise interest rates further in the near term.
Tokyo inflation figures often signal broader national trends and are closely monitored by the Bank of Japan as an indicator of underlying price pressures.
Investors brace for Trump tariffs deadline
Other Asian markets only edged higher as investors cautiously braced for a July 9 deadline, when U.S. reciprocal tariffs are expected, potentially escalating trade tensions.
U.S. Commerce Secretary Lutnick told Bloomberg TV on Thursday that the U.S. and China have finalized a trade deal first outlined in Geneva, adding that deals with 10 key trading partners were imminent.
Meanwhile, a ceasefire between Israel and Iran brokered by U.S. President Trump earlier this week appeared to be holding through Thursday, easing fears of supply-chain disruptions that had pressured global markets.
China’s Shanghai Composite index was largely unchanged, while the Shanghai Shenzhen CSI 300 edged 0.1% higher.
Hong Kong’s Hang Seng index rose 0.4%
Australia’s S&P/ASX 200 traded marginally higher, but hovered near record highs.
The Philippines’ PSEi Composite index gained 0.7%, while Singapore’s Straits Times Index rose 0.6%.
Futures tied to India’s Nifty 50 inched 0.2% higher.
Bucking the regional trend, South Korea’s KOSPI declined 0.8%, due to continued profit-taking after stellar gains earlier this month.